6 ways a mac and cheese millionaire created a priceless workplace culture
Before Erin Wade was a dissatisfied lawyer who decided to open a restaurant, she was a dissatisfied restaurant employee. Her choice to return to the food industry and open Homeroom, a popular Bay Area mac and cheese restaurant, came with a commitment to create the supportive workplace culture she’d always longed for.
“Starting Homeroom was not just about [being] excited to bring my dad’s mac and cheese recipe to the world,” Erin said. “It was driven by my deep desire to create a place where other people would want to work, where they could have the experience that I had not had—of seeing a future for themselves and feeling like they were part of something that meant something.”
In 2011, the chef set aside her law career to open Homeroom, armed only with her dad’s recipes and funds from a Kickstarter (crowdfunding) campaign. The concept quickly became more successful than she ever imagined—growing to three locations and 7,000+ Yelp reviews—but the journey wasn’t easy. Erin is the first to admit that her greatest discoveries were born out of trial and error, a process she recounts in her book, “The Mac & Cheese Millionaire.”
“The book is filled with ridiculous stories about all the mistakes I made. But that’s the thing I’m most excited and proud of,” she said.
Business: Homeroom
Founder: Erin Wade
Location: Oakland and Berkeley, California
Most helpful lesson: “The biggest lesson I learned time and again is to always listen to my team.”
Best management secret: “When you’re managing people, [think about] creating a coloring book: Here are the outlines, here’s the picture. We’re all drawing together. But everyone’s coloring book page is going to look different because they’re going to color it differently.”
Keep reading for more mistakes-turned-lessons from mac and cheese millionaire Erin Wade, whose workplace innovations have been covered in Forbes, The New York Times, and more.
1. As a new business, give your customers more than they bargained for
It took about a year to build out the restaurant, and in that time I was doing a lot of [pop-up] events, just trying to get a sense of what speaks to people. How are we going to cook this? How should we price it? What do people like about it? What should we improve?
[At one of these pop-up food events,] the average price point was somewhere between $8-10. People were serving a sandwich, a plate of chicken, whatever it was, and I priced my bowls of mac and cheese at $2—which is just obscene. I mean, that makes no sense at all. But I really wanted no one to ever think twice about getting it. I wanted to be packed. I wanted to sell out.
In hindsight, that was genius. This was not the moment to be worried about maximizing my revenue. This was the moment to get my food in as many people’s hands as possible, to be generating goodwill, to be creating this sense of value that pervaded Homeroom even later. [I wanted people] to feel like: ‘Oh my God, I’m just excited to get this, to try this, to be part of this. And I want to come back for more.’ In general, that value of giving people so much more than they are anticipating proved really critical to Homeroom’s success.
2. Model interviews after the job, and evaluate performance based on your values
Hiring is eerily like dating in so far as really what you’re measuring is how good a conversationalist someone is. You don’t know: “Is this person going to be reliable? Can I count on them? Are they a good human being?” All you know from sitting and having a coffee is just, “Are they fun to talk to?” But that’s very different from a great employee.
Over time we recognized, “How can we make a job interview look more like the job?” We started paying people to do trial shifts to actually see how they work. If it was a leadership role, we’d give them an assignment and pay them to do it [so we could measure]: “Can this person do the job? How are they going to think about this thing?” We moved from a conversational approach to a task-based approach.
As time went by, we started hiring, training, and promoting based on our values as well. We wouldn’t just be interviewing you for skills—we would also be trying to suss out: “Is this person going to be able to be a great collaborator?” We also evaluate [current team members] based on those things. Only 25% of your yearly valuation is about your technical job skill. The other 75% is based on other values that we care about: Were you seeing problems and helping solve them? Were you good at collaborating with other people? Could we rely on you? Because those things matter, and those are the sort of [soft skills] businesses talk about, but then they don’t necessarily hire, train, or promote on the basis of them.
3. Being a great leader is creating ‘boundaries within which people have the freedom to be themselves’
I had this vision of a utopian workplace, but I did not have examples of how to create such an environment. I really wanted to give people the kind of trust and freedom that I wished that other employers had given to me. But what ended up happening was I replaced one dystopia with another. A work environment that has too many rules, too much structure, and no freedom feels really bad, but you know what also feels really bad? One where no one knows what the heck to do.
Our first staff meeting, people were panicking. They were like: “There’s no dress code? There’s no vacation policy?” Their confusion definitely helped guide me in a different direction. Ultimately where I landed was that my job was not to just provide complete freedom, or to be really strict. It was actually to create boundaries and expectations within which people have the freedom to be themselves.
An analogy I use is creating a coloring book, not a blank page and not a paint by number. It feels really uninspiring to work at places where there’s no differentiation, no room for your own personality or individuality. But likewise, it is not fun to be handed a blank page and have no idea what to do. And it’s not a good business practice, because if everyone is doing something different, customers are going to get different experiences.
4. Follow the ‘stoke out rule’ to delight five customers a day
[In the beginning when] I was trying to figure out our service standards, I knew I didn’t want strict ones like a large chain. I did not want scripts. But it couldn’t be a total free-for-all or customers were going to have really different experiences.
We ended up with what we called “the stoke out rule,” which a really great server and later manager came up with. He was always providing great service, so one day I asked him: ‘Please tell me your secret. I’m trying to figure out how to codify this somehow and train people.’ He was like: “I’m always trying to do a great job, but realistically I can only do an over-the-top, great job with maybe one table an hour. I try to stoke out five tables every shift.” What that means is these people are going to walk away and feel like this was the best restaurant experience they’ve ever had.
We started telling servers that this is a job expectation: “You need to stoke out five tables every shift, but you can use your creativity. You have our full power. You can comp the entire bill if you want, but we want you to think of different ways to do this.” And they would. Again, the structure of the coloring book was to stoke out five tables, but within that people had total freedom to use their own minds and creativity.
5. Trust your team with financial transparency
[As the owner] I was the one holding a lot of the information about the business. And there’s no way that you can run a great team if they don’t know how they’re doing, what the measures of success are, and how to influence them. I realized that was really my goal as the leader, right?
So we started [increasing] transparency—financially and otherwise—and started teaching people about the business. We started having them participate in it. That was a sea change because I think most companies any of us have ever worked in, restaurant or not, it’s very rare to have people share any meaningful financials or to engage collaboratively on figuring out how to improve them. But that really made a huge difference for us.
There’s a lot of fear in not just the restaurant industry, in all industries, about sharing [financial numbers.] You don’t have to share every single number under the sun. You don’t share individual salary information. But you get so much more than you’re giving. When you show trust, people tend to give it back to you.
6. Update policies and procedures to prevent workplace harassment
We built a culture based on collaboration and transparency [at Homeroom]. One of the greatest things to come from it is our system for dealing with sexual harassment. How it all got started was actually quite unfortunate. One of our team members was harassed by a guest in a pretty appalling way, and it set off this chain reaction amongst a lot of servers who were like, “Hey, I’ve [experienced] something like that. I’ve had a guest like that.” What’s embarrassing is, I had no idea.
I felt like if our servers were getting harassed, our servers needed to help figure out how we solve it. So we held a number of meetings. We tried a number of things. We came up with a color-coded system of yellow, orange, red, and there is an automatic action that a manager needs to take when a color is reported. What’s so cool about the system is it doesn’t require people to relive or justify the experience that they’re having. They just say a color and an action happens. It ended up being hugely successful and really transformational for us.
I wrote about it in the Washington Post in a piece that went viral. The Equal Employment Opportunity Commission (EEOC) ended up adopting it as a recommendation by a [workplace harassment] task force. It is currently used by restaurants and bars all around the world. I’m really proud that’s something we came up with to help other people.
Bonus tip
Do: Collect daily feedback via team “report cards.”
How: Have staff summarize their day, including suggestions for improvement or how they solved a problem during their shift.
Result: Become proactive with customer feedback and learn how to improve the customer experience in the moment. Communicate results to your staff to show how you implemented their feedback.
These lessons come from an episode of Behind the Review, Yelp & Entrepreneur Media’s weekly podcast. Listen below to hear from Erin, or visit the show homepage to learn about the show and find more episodes.